How to Sell an Inherited House in California (Step by Step)

You just inherited a house in California. Maybe a parent passed away, maybe it was an aunt or grandparent. Either way, you're now responsible for a property you didn't plan on owning — and you're not sure what to do with it.

You're not alone. Nearly 60,000 homes were transferred through inheritance in California in the past year alone — that's 18% of all property transfers in the state, more than double the national average. And with Baby Boomers sitting on 41% of all U.S. residential property, that number is only going up.

Here's a straightforward guide to what happens next, what it costs, and how to sell if that's the right move for you.

Step 1: Figure Out How the Property Transfers to You

How you receive the property determines how quickly you can sell it and how much red tape is involved.

If There's a Trust

Good news — you skip probate entirely. The successor trustee (often you) records an Affidavit of Death with the county, and the property transfers according to the trust's terms. This typically takes 30-60 days. You must notify all beneficiaries and legal heirs within 60 days, and there's a 120-day contest period.

You can usually sell the property once the trust administration is underway.

If There's a Will (But No Trust)

The property goes through probate — California's court-supervised process for distributing a deceased person's assets. This takes 9-18 months on average, even for simple estates.

You can sell once the executor is formally appointed and receives Letters Testamentary from the court (typically 6-8 weeks in). But the sale may require a separate court approval hearing.

If There's No Will

Also requires probate. The court appoints an administrator and distributes assets according to California's intestate succession laws — spouse first, then children, then parents, then siblings.

New Shortcut for Smaller Estates

As of April 2025, AB 2016 allows a simplified transfer of a deceased person's primary residence valued up to $750,000 without full probate. This is a major time and money saver if your situation qualifies.

Step 2: Understand the Cost of Probate

If you're going through probate, here's what it costs. California sets statutory fees for both the attorney and the executor based on the gross estate value:

4% of the first $100,000
3% of the next $100,000
2% of the next $800,000
1% of the next $9,000,000

On a $1 million estate, the attorney gets $23,000 and the executor gets $23,000 — that's $46,000 in statutory fees alone. And attorneys can request additional fees for "extraordinary services" like handling real property sales, tax returns, or disputes.

Add in court filing fees, probate referee fees, publication costs, and bond premiums, and you can see why many families look for ways to avoid probate.

Step 3: Know Your Tax Situation

The Stepped-Up Basis (The Good News)

When you inherit property, your cost basis "steps up" to the fair market value on the date of death. This eliminates all the appreciation that happened during the previous owner's lifetime.

Example: Your parents bought the house for $100,000 in 1985. At the time of death, it's worth $800,000. Your stepped-up basis is $800,000. If you sell for $810,000, you only pay capital gains tax on the $10,000 gain — not the $700,000 of appreciation.

California is a community property state, which means when one spouse dies, both halves of community property get the stepped-up basis. This is a significant advantage.

Important: California has no state inheritance tax and no state estate tax. The federal estate tax exemption is $15 million per person in 2026, so most inherited estates owe zero estate tax.

Proposition 19 (The Bad News for Non-Primary Residences)

Before 2021, you could inherit a property and keep the parent's low property tax assessment — even if it was a rental or second home. Proposition 19 changed that.

Now, the parent-to-child property tax exclusion only applies if you move into the house as your primary residence within one year. If you don't — which is the case for most inherited homes — the property is fully reassessed at current market value.

What that looks like: A home your parents bought in the 1980s might be assessed at $200,000 with annual property taxes of about $2,200. After reassessment to the current value of $1.2 million, your annual property tax bill jumps to roughly $13,200 — an increase of $11,000 per year.

This is one of the biggest reasons heirs decide to sell rather than hold onto inherited property.

Capital Gains If You Sell

Thanks to the stepped-up basis, your capital gains tax is usually minimal if you sell relatively soon after inheriting. But if you hold the property and it appreciates further, you'll owe:

Federal: 15-20% long-term capital gains rate, plus potentially 3.8% Net Investment Income Tax
California: Taxed as ordinary income at rates up to 13.3% (no preferential capital gains rate)
Combined worst case: Up to 37% on gains above the stepped-up basis

The takeaway: if you're going to sell, selling sooner rather than later minimizes your tax exposure.

Step 4: Deal with the Carrying Costs (They Add Up Fast)

Every month you hold an inherited property, you're paying for it. Common carrying costs include:

Property taxes — and post-Prop 19, these may have just spiked dramatically
Insurance — standard homeowners policies often cancel coverage after 30-60 days of vacancy. Vacant home insurance runs $3,000-$5,000+ per year
Utilities, landscaping, basic maintenance — $500-$1,500/month to keep a vacant home from deteriorating
Mortgage payments — if there's an existing mortgage, the estate must keep paying or face foreclosure
HOA fees — continue regardless of occupancy

All-in, carrying a vacant inherited home in California can easily cost $2,000-$3,000+ per month. The longer you wait to decide, the more it costs.

There's also the risk of squatters, vandalism, and deterioration. Unoccupied homes are targets for break-ins and copper theft, and problems like plumbing leaks and pest infestations go undetected in empty houses.

Step 5: Navigate the Family Dynamics

If you're the sole heir, decisions are straightforward. But if there are multiple siblings or beneficiaries involved, things can get complicated.

Common conflicts:

One sibling wants to sell, another wants to keep it
Disagreements over sale price or timing
One sibling lived in the home and feels more entitled to it
Nobody wants to front the money for repairs or carrying costs

Under California law, any co-owner can file a partition action to force a sale — even with unequal ownership shares. Courts have held this as an "absolute right." The Partition of Real Property Act (effective 2023) gives other heirs the first right to buy out at fair market value before a forced sale happens.

But partition actions take 6-12 months and cost thousands in legal fees. It's almost always better to have a direct conversation with your siblings and come to an agreement — even if it means one side compromises.

Step 6: Decide How to Sell

You have two main options:

Option A: List It on the Market

Potentially higher sale price, but it comes with significant requirements:

Clean out the house (personal belongings, furniture, years of accumulated stuff) — typically $2,000-$10,000+
Make repairs and updates to get it "market ready" — often $20,000-$100,000+ for older inherited homes
Stage, photograph, and show the property
Pay 5-6% agent commissions
Wait 3-6+ months on market plus 30-45 day escrow
Deal with buyer financing contingencies, inspections, and appraisals
All heirs must agree on every decision — price, repairs, counteroffers

Option B: Sell for Cash As-Is

Lower sale price, but dramatically simpler — especially for inherited property:

No repairs or cleanout needed. Sell the property in whatever condition it's in, with the furniture and belongings still inside if needed
No showings. One walkthrough and done
Close in 2-3 weeks instead of months
No commissions or listing fees
No financing contingencies — cash deals don't fall through because a buyer's loan got denied
Simpler for multiple heirs — fewer decisions, faster resolution, everyone gets their share sooner
Works within probate timelines — cash buyers are experienced with court-supervised sales
Stops the carrying cost bleeding immediately

For many families — especially those with multiple heirs, out-of-state beneficiaries, or properties needing significant work — the cash option makes the most sense when you factor in the carrying costs, repair costs, and time value of money.

What About a Reverse Mortgage?

If the deceased had a reverse mortgage, the loan becomes due within 30 days of death. Heirs typically have 1-6 months to pay off the loan, sell the home, or deed it to the lender.

The important thing to know: reverse mortgages are non-recourse loans. You are not personally liable for any shortfall. If the house is worth less than the loan balance, you can walk away without owing anything.

If there's equity above the loan balance, selling quickly (often to a cash buyer) lets you capture that equity before additional interest accrues.

Ready to Sell an Inherited Property?

If you've inherited a house in California and you're ready to move forward, we can help. We buy inherited properties across the state — in probate, in trust, with multiple heirs, in any condition.

No pressure, no obligation. We'll make a fair cash offer and work around your timeline, whether you need to close in two weeks or two months.

Give us a call or fill out the form below to get started.